Moody's drops Tenn. Energy Acquisition bonds to A2

Moody's Investors Service said it downgraded the rating of Tennessee Energy Acquisition Corp.'s $1.05 billion series 2006C gas project revenue bonds to A2 from Aa3. The rating had been placed on Watchlist for possible downgrade following Moody's downgrade of the insurance financial strength rating of MBIA to A2 from Aaa.

MBIA acts as a surety bond provider and provides customer insurance policies that cover the municipal participants' failure to pay.

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